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My parents were Fools all the way!
My parents showed me what NOT to do with money!
I learned some good/some bad financial habits from my parents.
My choice isn't here.

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I voted for good/bad. Basically, they were really good about saving and LBYM, but not too Foolish at investing. MMAs and CDs were about it when I was growing up.

-Agg97
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{{I voted for good/bad. Basically, they were really good about saving and LBYM, but not too Foolish at investing. MMAs and CDs were about it when I was growing up.}}


are MMA's and CD's automatically not a Foolish way to save? I know that both of my sets of grandparents saved money in CD's and were able to have enough for retirement and pay for much of their nursing homes. Though I know they did wind up using government money to pay for medical bills.
I know my wife's grandparents had a decent pension and supplement their pension by the interest earned off of CD's. That has allowed them to not retire early as I want but at least to retire comfortably.



c
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I voted for good/bad. Basically, they were really good about saving and LBYM, but not too Foolish at investing. MMAs and CDs were about it when I was growing up.


All I can say is, "DITTO!" :)
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are MMA's and CD's automatically not a Foolish way to save?

I would say probably not anymore. You mentioned your grandparents had a decent pension, which was supplemented by interest from CDs. Well, decent pensions are almost a thing of the past. Inflation would eat up the interest from CDs. So, I think you need to look at other investments that offer a greater rate of return, to keep up with inflation and to give you a nest egg to take the place of a company pension.
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are MMA's and CD's automatically not a Foolish way to save?

Well, they're in their late 50s now. My dad got laid off last December and they still don't have enough to comfortably retire. If they had been more Foolish, they would be on easy street right now.

MMA's and CD's have their place in a portfolio, but IMHO not a key factor in long-term savings.

-Agg97
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No. of Recommendations: 7

My dad handled all the finances, and he always made sure he put money into his investment plan every paycheck. My mom told me once she would get upset with him, because all us kids (5 total) needed shoes. But he would do it anyway. Funny thing is, I don't remember thinking I needed new shoes.

My dad's parents declared bankruptcy in their early 70s. I don't know any of the details, but my dad always looked to them as an example of what not to do!

One thing I remember vividly is when I was at a friends house one afternoon and her mom came home from work with shopping bags. She had gone shopping during the day and gotten new jeans and a top for her daughter. So she walks in the room and gives her the stuff like it's no big deal. And my friend was looking at the 'loot' like it was no special thing. I was FLABBERGASTED! NEW CLOTHES?? In the middle of the school year?? Madness!! But she was an only child and her parents both worked. I am the youngest of five and my mom stayed home.

It was then that it occurred to me how different our lives were - sort of. We were both pretty happy in general. Same neighborhood, same school, same friends. She had new stuff all the time, I had hand-me-downs and stuff my mom made. But in general, I think, kids don't care.

--Trudy
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Mine were great at LBYM and saving a good chunk for investing. They are retiring next year at the ages of 63 and 62 very comfortably. They invested in real estate but chose a location that has not appreciated much. They did get a decent return from real estate via rental income.

Their stock and bond investment returns were below average until 2000. Dad always read books and newletters that preached "the end was near" so he usually stayed out of stocks unless they were in the mining sector. After mid 2000, of course, he looked like a genious and saw double digit returns investing in commodities, real estate and bonds.

If I had ignored his investment advice during the 90s, I would probably be 5 years from FIRE. As it was, I missed out on a lot of the glorious 90's by not having enough assets in growth stocks.

decath
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No. of Recommendations: 6
I voted that my choice isn't here. My parents basically taught me next to nothing about finances. Money was rarely discussed at our house, but I got the impression from my dad's grumblings about paying the bills and my parents' hushed discussions about finances, that we were pretty much living paycheck to paycheck. I don't think they know how to live below their means -- although my mom clipped coupons and shopped grocery sales, my parents bought lots of stuff that they probably didn't need. As a teenager, I didn't really want to ask them for money to buy clothes, so I would use babysitting money and money from a job at a fast-food restaurant to buy clothes for school. I often felt like my family couldn't afford a lot of things, but we had cable, lots of magazine subscriptions, and a riding lawnmower for our 3/4 acre yard (because my dad was hoping his daughters would be more willing to mow the yard on a riding lawnmower -- I did use it some and thought it was pretty fun to mow the yard on a riding lawnmower at age 14.) After I moved out, I have witnessed my parents order vitamin packs, weight loss programs, books, and lots of other stuff they didn't need through the mail. They have also helped my sister out financially quite a bit, including paying off her car that my dad co-signed for. My sister has really struggled to manage her own finances. Maybe I should have voted that my parents showed me what not to do with money.

My dad got paid once a month and would sit down to pay the bills at that time. I have found out in recent years that by doing this, he pays some bills after their due dates and has paid some late fees. (When I suggested that he try to change the due dates to coincide with when he paid bills, he said that he tried on some of the utilities and they wouldn't change the due dates.)

I don't think my parents have any savings other than my dad's 401K. And my dad has taken loans out on his 401K at least 3 times that I know of -- one loan to help pay for my freshman year of college (I paid for the rest on my own using student loans after I got married), one loan for my sister's freshman year of college (she quit school after that), and a loan to consolidate debts, I think. From reading The Motley Fool Discussion Boards, I think that taking out these loans was probably not a good idea.

So from this background of learning little about saving and LBYM, I struggle to learn Foolish ways of managing my own money. The Motley Fool website and discussion boards are helping me immensely.

Thanks.

Karen
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What I learned from my Mom was that you can always go to her Mom. My Grandmother bailed my Mom out several times when I was in my teens. My Mom couldn't and can't keep track of money. She always sees something that looks great in the store and then at home collects dust.

I had to balance the checkbook for my Mom, or at least try, I don't think we ever got it right. Savings?? My mother has never had a savings account that carried more than $100 for six months.

I have learned a lot from this, but it was how not to do it.

fredinseoul
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No. of Recommendations: 10
My parents were Foolish with a great big capital "F"!!

My only question is, why did I learn nothing from them?

They have built a small struggling farm in the early '60s, to a multi-million dollar enteprise now.

They buy more land with cash. They buy machinery worth up to $1/2M with cash! They turn over more in a year than I will probably see in a lifetime.

But they are the classic "millionaires next door". They drive a new car, but it's a Ford Falcon, not a mercedes. They go on a 2-week driving holiday once a year. Went to New Zealand once, but mum said "it's not as good as home", so now they just stay here.

Kind of funny, really. Dad's cousin, when we were growing up, had the farm next door. I remember thinking how rich they were - they had their own plane, drove a mercedes, & mum & dad went on O/S trips at least once a year. We had birthday parties at home, & went to the beach for holidays.

Now? Well, I told you where my mum & dad are. They also bought up his cousin's farm when he went bankrupt. And he does mechanical work on dad's machinery, so that dad has more time with mum!

Primm
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are MMA's and CD's automatically not a Foolish way to save? I know that both of my sets of grandparents saved money in CD's and were able to have enough for retirement and pay for much of their nursing homes

My parents bought hundreds of thousands of dollars in long term CDs when the rated were 9-10%. As the market has been down, they haven't second guessed their investment at all.
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I voted :My parents showed me what NOT to do with money!

Although my mom did very well for herself in her career, she always had too much of everything. Big houses, mercedes, designer clothes for everyone (even me in grade school), super high credit card balances, etc. She and my step-dad paid for my college and handed even me a car when I was 16. I won't say I wasn't spoiled rotten because I WAS. Now that I've been on my own, gotten married, bought/sold homes and cars my DH and I are becoming Foolish.

Mom calls from time to time "Quicken is out of balance and I don't know what happened." I say, "by how much?" Response "28 thousand!" I gave up that instant.

I've tried to explain that they should move from an expensive area (Fairfax, VA) to a lesser expensive one. Won't do it. I try to explain that there is no sense in having THOUSANDS of dollars of wood in your living room when you aren't using it (mom is a decorative painter and woodworker in her retirement -- strictly hobby she doesn't have the "sales" gene and just ends up giving it all away.)

She has her gov't retirement and that's IT! I know that if she lives to an old age I'll be supporting her somewhat and have tried like hell to get her to change her spending habits but it all falls on deaf ears.

When we lost $50k on our home in NY recently she called offering money... I said "we've got it covered, but what money do you think you HAVE to offer?" I think that may have hit home. She couldn't have helped and that freaked her out a bit.

Oh well, enough of this. If her DH ever loses his job they will be in a world of hurt and hopefully then she will cutback.

96hokies
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I always thought that my parents weren't smart about money, but now I'm thinking that maybe I'm wrong.

They didn't have credit cards until after Dad retired from his 30-year military career. I think they just got a credit card to make traveling easier.

They sold their house in popular Arlington, VA, in 1974 to retire on the Eastern Shore of Maryland. Then they paid off their 30-year mortgage several years early. I thought they were stupid to live in a house made out of money while the stock market was zooming.

I checked www.realtor.com the other day to see what the value of their house was doing. Dang, houses near them have gone up in a big way! I figure they've earned about 8% a year on that house of theirs!

Their financial picture isn't all rosy. But these days, I'm thinking that they were unwittingly pretty smart.

phantomdiver
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No. of Recommendations: 13
My dad is a shade-tree auto mechanic and mom is a manager of a call center. Combined, they never made more than $30,000 per year. Dad owned several business off and on and they never spent a nickel on anything.
My brothers (2) and I always thought we were dirt poor, and we learned to work, save, and do without.

Imagine my surprise when my dad walked away at 42 and retired. Mom now works 30 hour weeks just to get the insurance. Dad has a great life as well. After 30 years of working on cars, everyone in town knows him. A few days a week he'll open the garage door (a sign to those who need him) and people will drive up with their ailing autos. Some he fixes, some he consults, but he is always cheaper than the dealership.

Now in their early fifties, my parents are traveling and relaxing and enjoying being grandparents instead of slaving toward 65.
Don
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"Then they paid off their 30-year mortgage several years early. I thought they were stupid to live in a house made out of money while the stock market was zooming."

My parents did the same thing. About 3 years ago they paid their mortgage off, which was about 12 years early. My father used to say there are 10 rules for financial happiness. He'd say Rule #1 is to stay out of debt and the other 9 rules don't matter.


Now they are ready to retire several years early and will probably bring in more money in retirement than when working due to pensions/401ks/IRAs/taxable accounts and ... no debt.

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No. of Recommendations: 19
Is it my turn to brag about my Foolish parents? (loooooooooooong)

They married right out of college (well, Dad had been out a year) in 1966. The kitchen table they bought - a wood one - now sits in our house. My mom always tells me how thrilled she was to buy it. She didn't think they'd have enough money for a wood table and would have to get an old formica one. (Which she could probably sell on eBay for big "retro" bucks theses days, but i digress.) I'm wondering what they sacrificed for that table...

Dad told me that his mother gave them a box of random non-perishable food for their first apartment. Money was usually tight 'round month's end. He said if it weren't for some of the soup Granny had given them, they'd have gone hungry a few times.

They bought a 3BR/1.75 new l'il ranch in 1969 and had to borrow $700 from my mom's parents as a down payment. (The house cost $20K.) Grandmother later told Mom that she and Grandfather never thought they'd see that money again. (My parents paid that back first - and within a few months.)

They thought they'd trade up a few years down the line, but the interest rates went insane in the 70s and they stayed put. By the time the 80s rolled around, there really wasn't much point in moving, since they'd be empty nesters in ten years. So, as my dad says, their starter home became their retirement home.

They had one car until they bought a Fiat convertible in the early 1970s from a neighbor after he got over his mid-life crisis. They held onto it until 1976 when they got the first of two station wagons. They did buy new - mostly because they recognized their weakness in not knowing cars very well - but held onto cars for as long as possible. In 1986, my grandmother sold us her pristine three-year old Cutlass for the price the dealer said he'd give her. (This was the car my brother and i learned to drive in.) This repeated every few years and our house resembled a used Olds dealership. The next one replaced the 1976 station wagon (donated to Volunteers of America); the following one replaced the 1985 station wagon (given to me as a college graduation present to trade-in [$2000] for my first car). This continued until my grandmother's car keys were pried from her hands (under protest - but for the best, really). Mom drove this last Olds until Grandmother passed away and it was given to my brother.

Dad got his dream car, a Cadillac, shortly after retirement (at age 55) and said, "It finally happened: I paid more for a car than i did for my house." Mom just got her dream car, a zippy little Volvo, a few months ago, after my brother took over Grandmother's last car.

They LBYMed without thinking - raised that way. Neither were dirt poor, though my dad probably grew up pretty close but had food, shelter and clothing, certainly. (As a little girl, i once asked my Grandmother how she could afford to buy me presents all the time since "Mom says you were really poor when she was growing up!") They taught us about choices - sure, they COULD buy new cars and homes and clothes and toys, but they preferred to save for emergencies and retirement rather than max out their credit. (Mom retired a year after Dad at age 52.)

Dad, the financial whiz, leapt into the 401(k) as soon as it was offered in the late 1970s. He swears if it had been available when he started working in his late teens, he could have retired at age 40. Regardless, he plugged money into savings vehicles. (I don't know the particulars of his portfolio, but he does rave about American Funds and their very low costs.) They opted not to pay down their mortgage, btw, and used the $200+/- per month elsewhere (see aforementioned savings vehicles). It was paid off in 1999 - which my mom said seemed like SUCH an eternity when she signed the papers thirty years prior.

They weren't perfect. They bought a rental property, thinking it would pay for our college educations. They quickly discovered they were not good landlords. A year or so later, they sold it and about broke even. They still managed put us both through college. (Dad worked through college and swore no kid of his would have to do that.) In hindsight, he and i agree that i should have had a bit more responsibility in that department.

I certainly wasn't perfect, either. I wanted a basement, a big fat allowance, my own bathroom, a TV in my room, new clothes every month, a car when i turned 16...but i also learned to keep my mouth shut. It's one thing to express desires, it's another entirely to complain repeatedly about not having anything. Too much poor-mouthing could really make Christmas and birthdays devoid of presents (and deservedly so). I envied my friends but also appreciated what i had.

My parents (and like-minded parents of friends) would talk to me (and like-minded friends) about our peers who seemingly had everything and didn't appreciate it. They commisserated at how hard it was to see that and how unfair it was that spoiled brats who behaved so badly got rewarded with so many treats. (Like the gal who got a six-year old Mustang on her 16th birthday, complained about it to those of us who were CARLESS...and then got a brand new Sentra upon graduation.) They promised us that we would be "better" people because of it - building character and all that. We believed them (but we were still jealous). Now, most of the like-minded parents are retired, too, while the other parents are still working. The offspring seem to be following in their parents' footprints, whichever the case. Not exactly a statistically-significant sample, but thought-provoking.

In spite of the frugal lifestyle, they still enjoyed their lives. Hobbies, outside interests, friends, family and work kept them busy. We took Spring Break trips many a year. Dad golfed as much as possible. My brother and i were on swim teams galore. (<-- not cheap) We went out to eat to celebrate birthdays, Dad's Non-Smoking Anniversary, good grades and the occasional "just because". We had cable - and even HBO when it first came out! So, it was hardly a boring, deprived existence.

My parents now spend about four months a year in Florida (where they purchased a condo a few years ago). Their retired friends come visit (as do their still-working relatives) and they drive to see other friends who purchased homes in other parts of the state. It's great. When they're at home, they are pretty busy volunteering or golfing or lunching or working on the house - but they also take trips to see friends and family (including my brother and me). A wonderful, fulfilling life for two people who truly deserve it.

Besides the LBYM basics, they taught me how to enjoy the present while saving aggressively for the future. They taught me not to pay annual fees for credit cards and to pay off the balance every month. I signed up for a 401(k) the very second i was eligible at my first job, in addition to having $100 or so a month automatically deposited into savings. I gradually increased that amount and funneled raises and bonuses and monetary gifts into savings, too. The next year, at tax time, Dad told me i could pay the guvmint $300, or put $1300 into an IRA and pay nothing. I cleaned out most of my savings and opened an IRA. (Dad said he'd never been prouder. *sniffle*) The savings built itself back up in no time.

I married a guy who hates debt and loves to save. We wiped out my grad student loans and are working on our mortgage. We want to get that paid off and then do what we REALLY want to do. (DH - teach; me - volunteer; both - travel) I'm so glad my parents paved the way - they learned their frugalness from their parents (save my dad's father) but also did things "their way". That's the key - find out what works for you and go with it. DH and i differ from both sets of parents, but the foundation is the same: LBYM, pay yourself first and SAVE SAVE SAVE.

Works for us.

snippee
will shut up now
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No. of Recommendations: 2
My mom is very frugal by nature from her parents. Her grandparents were 1st generation to arrive from Poland. She had me read, "The Babylon" book - what was that thing called? Kinda like the Wealthy Barber, but set thousands of years ago...

Anyway, whereas Mom does great w/ frugality, she's not as up to snuff on some of the tricks of the trade for "tweaking" her finances. Eg, she's not as quick to do the credit card balance transfer game, had all her money in CDs for years instead of in equities, much less Roths, but she did contribute to a teacher's savings plan and will retire w/ two smallish pensions. And she's helped us buy a duplex which will be a source of retirement income too. So, I think she just doesn't "obsess" about financial things like I do, which is ok. She does great.

My dad isn't too hot I'm learning lately. Apparently he's had some spending issues which my mom has had to deal with (such as too much eating out and spending money on friends/relatives who have less money in order to 'appear' better off - and to innately want to help people despite that being NOT the way to help peopl) and he has less than stellar credit. Nevertheless, he holds to two constants: 1) once you own real estate, don't mess it up and 2) get a solid job w/ a pension and contribute to it's savings plans. Personally, he's a loose cannon I now realize and I worry for him.

My father-in-law, is a drunk and is a dummy when it comes to anything half serious. He says he knows everything, but frankly the guy hasn't a clue. We love him anyway and we'll be happy to help him out on *our* terms, not his. I think my wife got to where she is despite him and also because as the oldest, she was stuck w/ more responsibilities. She was raised fairly poor (living in a trailer in a meadow for a few years while pops was avoiding some bad debts, having only deer to eat, etc.), and I think she rebels against my frugality because of it. So, she keeps me honest on the "L" in LBYM, though our different perceptions of what "L" is causes some conflict. We get through and we've done fairly well.

Her mom is a bright pull-herself-up by her bootstraps type of lady who built some small businesses after she got divorced. I think she succeeded by hard work more than anything and we talk sometimes about how much BW and I analyze (well, probably just me) our investment decisions whereas her mom would just jump right into things. So, it worries me that her mom doesn't really understand taxes as much as she says she does and that she could be making some relatively poor decisions for lack of knowledge about the subject as she transitions from actively managing investments to retirement, but she'll do fine by sheer will power, I think.

Net, Net: I think both my wife and I work harder because we know what it's like to have to fight for everything we've got and when we get windfalls, we really want to make best use of them. We really sit back sometimes and realize that financially and career-wise, we're the only ones in our families who have even a remote clue. On the other hand, our parents handed down the invaluables: caring for your family, friends and neighbors, a hard work ethic and an understanding that happiness doesn't come from trends, fashion or "stuff."
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No. of Recommendations: 1
I voted My parents were Fools all the way! I am convinced they were 98% the way!

they were really good about saving and LBYM, but not too Foolish at investing.

My parents did many things correctly: live below their means, dove cars until they just about had to be hauled to the junk yard (when I was growing up they had the only two cars they had purchased new, all their other cars were purchased used), had mostly simple lifestyles but they did have their hobbies (but wouldn't indulge more in them than they can afford without jeapordizing long-term goals). I didn't know it at the time, but my parents made very heavy use of "automated savings" (payroll deduction, etc.) to feed their 401(k) and 403(b) plans, savings for shorter term goals--they had saved up to send every one of us kids through college, but I was the only one who took them up on that.

Father was a long-term buy-and-hold investor. It wasn't until he passed away, Mother went to a community college and took a class on investing, and took over the investments that we learned that Father used a Fundamental Analysis approach to buy and hold ... just about forever. Since Mother tended to be more of a communicator and thought that the stock market was just "legalized gambling", I didn't learn the value of investing from my parents. My parents subscribed to Changing Times, which I read every month, and Father subscribed to The Wall Street Journal, which I would occasionally read, so I had some exposure to personal finance and investing when I was growing up, at least had some ideas about them, even though it wasn't until about twenty years after I graduated from college that I actually started any investing, and that in an expensive 403(b), and then five years later, about 4 years ago, that I also started investing with a financial advisor that I really started learning about investing in mutual funds that I went back, examined my 403(b) investments, and switched 403(b) providers to TIAA-CREF.

So, yes, I think my parents are wonderful, was probably about 98% Foolish, and while the additional 2% would have been nice, I am still 99.999% richer due to the wonderful example and moral support of my parents.
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I got "financial schizophrenia" growing up. "Foolish (almost) all the way" meets "My parents showed me what NOT to do with money!"
My folks grew up during the Depression. Neither went hungry, but one was country mouse, the other city mouse, and those experiences influenced how they handled money.
As a young sprout I was exposed mostly to mom's money ways. This consisted of "I'm so sorry we can't afford to give you what your friends have" one week and "here! there's a little extra, so have a treat" the next. Didn't realize until I had a steady paycheck of my own what her problem was: she didn't know how to balance the money throughout the month. When she was growing up, her dad had some menial job which did not quite make ends meet, so her mom took in boarders, gave music lessons, etc. So the money in their house was inconsistent, and what my mom learned was to spend it when you had it cuz you might not have it tomorrow. (She never figured out that, if you don't spend it today, you will have it tomorrow.)
Fortunately, dad (country mouse) took care of the Important Bills. I would wager it never occurred to him to try to change mom. He just figured out how much they could afford to let slide down the drain every month, and that was her household budget. (And, to give her credit, she never wasted it so's we went hungry or anything. We just got cheap frivolous stuff instead of saving up for nicer frivolous stuff, or even saving up for non-frivolous stuff.)
But I didn't find out about how dad took care of money until I had some of my own. He's the one who taught me that saving was the way to get from Here to There, wherever There was, no matter how far away it was from Here.
Dad grew up in a time when you took a job for life and the company rewarded you for decades of service with a nice pension. He chose the government as his "company", but he would have had the same attitude nonetheless. Plus he'd had lots of loved ones wiped out in the Crash of '29, and never thought of the stock market as anything worth taking the time to understand. On the other hand, the foundation he gave me DID make it possible for me to figure that out for myself, fairly early, so I'd still call him Foolish even if he was a product of his times.
Overall, I'd say the two best lessons they gave me, money-wise, were:
1. never expect a hand-out
2. learn from the mistakes of others
I'm InLivingColor
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